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AirBnb Users Feel Heat from Boulder Zoning Enforcement

As Charlie Brennan reports for the Boulder Daily Camera, the zoning enforcement office sent 20 cease-and-desist letters to property owners in Boulder, demanding that they stop renting out rooms via AirBnb and VRBO.com (Vacation Rentals by Owner).

The demands appear to have come just in time for the winter holiday season, the time of Christmas ski and snowboard vacations.

Then the cease-and-desist letters were rescinded.

What Sparked the Fire in the Zoning Enforcement Office?

Residents' complaints seem to be the cause, based on Brennan's conversation with city spokesman Mike Banuelos. Banuelos said that one particularly overactive resident made 25 complaints (five of which weren't valid). Banuelos said that complaints like these drive zoning enforcement.

But it seems to be more a matter of pressure from the traditional hospitality industry, which certainly has a competitive stake against upstarts like AirBnb. AirBnb is the spectacularly successful San Francisco-based tech company that has transformed the rent-by-owner service model.

What is AirBnb?

Characterized as a type of social networking service, AirBnb facilitates the rent-by-owner model by connecting property owners' online profiles with users looking for a place to stay. People use AirBnb for all sorts of reasons, all of which lead back to the same net benefit: completing a successful rental transaction.

In Boulder, which hosts a significant amount of recreational tourism, AirBnb undoubtedly facilitates the rental of property, and reliably so. Vanessa Grout for Forbes wrote that AirBnb's high marks for customer satisfaction and user-generated feedback and ratings (in the traditional style of an online social network), as well as the hundreds of thousands of listings, make AirBnb's trustworthiness among more and more homeowners "evident." In other words, you can profit by renting out your home, especially in a city like Boulder, where many people have vacation homes.

Why Did Zoning Enforcement Rescind the Cease-and-Desist Letters?

Even though the executive director of the Boulder Convention and Visitors Bureau said, "It's not unnecessarily unwanted competition," as Brennan reports, it's clear that AirBnb and its users are making a significant competitive impact. "[They should be collecting and paying taxes for every night's stay," the executive director said. "That makes for a level playing ground."

Given that the apparent aim of Boulder zoning enforcement was to provide for a level playing ground, as seems likely under the circumstances, it's curious as to why the office so hastily rescinded its cease-and-desist letters.

Perhaps the collective political clout of the Boulder residents themselves outweighed that of Boulder's hospitality industry, because roughly a week after the first report, the Denver Business Journal reported that Boulder pulled back on enforcement action. Residents with cease-and-desist letters in their hands were told to ignore them, according to the Journal, despite the fact that renting space in a residential area is not legal.

What's Next?

Expect more to come on this. According to Sarah Kuta with the Boulder Daily Camera, there were 20 vacation rentals in Boulder in 2009. Now, in 2015, that number has climbed to 500, and yet we don't have sound policy in place to address this new mode.

The Boulder City Council has its work cut out for it this year. It will need to figure out a way to accommodate market demand for web-based services like AirBnb and VRBO.com, balancing the interests of the hospitality industry, property owners, renters/vacationers, and Boulder government.

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